Wednesday, October 12, 2011

Math Lesson

Let's be
clear. There are three kinds of people in the world: those who are good at math
and those who aren't.

Unfortunately,
politicians as a rule don't fall into the category of those who are good at it.
At least that is the impression most of them give when they open their mouths.

So it was
refreshing last month when President Obama invoked mathematics when answering
criticism of his proposed so-called "Buffett rule." Said the
president, "This is not class warfare; it's math." Nothing quickens
my heart more than a political leader invoking the unambiguous certainty of
verifiable arithmetic. But, as he usually does when talking about economic
matters, the president disappointed. There is nothing at all wrong with the
"Buffett rule" or increasing taxes on the super-wealthy and, in fact,
it's basically a good idea. They already pay the bulk of the taxes, but they
can afford to pay more. And tax rates on individuals in America are at
historically low levels. (Taxes on corporations are another matter.) But the
problem is that the tax bracket that takes in many wealthy individuals also
takes in individuals who are operating businesses and who are not necessarily
wealthy themselves.

But in
trying to solve the fundamental problem of the government spending much more
money than it takes in, neither the "Buffett rule" nor anything in
the president's so-called jobs plan does anything about that problem. There's
no point arguing over what the role or scope of government should be if a huge
portion of the government's spending has to be borrowed in the first place.
There's your math, Mr. President. If you take the number of taxpayers who would
be affected by the president's proposed taxes on the wealthy and multiply it by
the amount of additional tax each would pay, it amounts to what pundits like to
call a rounding error in the federal budget. You would raise significantly more
money by taking one single dollar from every man, woman and child in the country
than you would by confiscating all the income from the super-wealthy. That is
because the super-wealthy are such a small group. The Occupy Wall Street
protestors keep chanting, with a bit of hyperbole, that the ratio of
super-wealthy to everyone else is 99-to-1. No matter how much money you take
from that one percent (the proposal actually targets around the top two percent),
it's not enough to solve the problem. And, incidentally, if the protestors are
truly distressed by the profits of brokers and banks, then the deficit should
be their main issue. Look at how much of everyone's tax money goes not to
programs that help people but to bankers and brokers servicing the debt.

In
fairness, the president did not actually claim that his proposed tax increases
would solve the deficit problem. They are meant only to pay for the new
stimulus he wants. The president continues to focus on the next few weeks or
months instead of on the looming disaster that is threatening the very
viability of government.

One
politician who does not shy away from mathematics is House Budget Chairman Paul
Ryan. He has proposed a very specific plan for aligning federal revenue and
spending over several years. There is much to criticize in his plan, but the
reason it is easy to criticize is because it is full of specifics. If the
president has crunched his own numbers to solve the structural deficit problem,
he has not shared them with the public. Instead, he diverts attention from the
problem by criticizing the opposition, for not supporting one more stop-gap
stimulus proposal that even much of his own party doesn't support--and by
talking of raising taxes on the wealthy. The Washington press corps doesn't help
much because it is quite willing to follow each distraction the same way a dog
follows a tossed ball. It is more interested in figuring out who is
"up" and who is "down" in the political battle than dealing
with the economic substance.

The reality
is that, at some point, some leader is going to have to deliver some very bad
news to the American people. The problem with talking about raising taxes on
the wealthy is that it gives people who are only causally paying attention the
impression that this will solve the problem. It won't. No one can blame the
president for not wanting to be a buzz kill with the election season already
underway. Assuming he understands the problem, however, he will stand a much
better chance at re-election if he can talk about the economic situation in
terms that people can understand and demonstrate leadership in confronting it.

Instead, he seems to be pinning his hopes on
putting short-term blame on a party that, during his term, has held only one
house of Congress for only one year. (He seems to have realized that too much
time has gone by to keep blaming the previous administration, although his
surrogates continue to do so.) That will be a neat trick if he can pull it off.
But even if it does, the country won't be any better off. He seems to be hoping
that, if he looks after his re-election, maybe the economy will fix itself.

The Latest Novelfrom Scott R. Larson

About Me

To date, I have written four novels. The latest, The Curse of Septimus Bridge, a tale of mystery, passion, romance, the supernatural, reincarnation, and the need to fight demons, both figuratively and literally. My other books include Maximilian and Carlotta Are Dead, about two young men who take off on an ill-advised adventure in Mexico in the summer of 1971; its sequel, Lautaro's Spear; and the swashbuckling sword-and-sorcery saga, The Three Towers of Afranor. When not writing novels, I blog about film, world events, and my books. Originally from California, I have also lived in Ohio and the Pacific Northwest, as well as in France and Chile. Currently, I find myself ensconced in rural life in the West of Ireland.